Two new reports: Addressing nonfilers and complying with direct contact rules Inbox Treasury Inspector General for Tax Administration Unsubscribe Thu, Sep 3, 6:39 AM (1 day ago) to me TIGTA Agencywide Coordination Could Enhance the IRS’s Approach to Nonfilers Why did we do this audit? Nonfilers are taxpayers who do not timely file a required tax return. We accessed the Small Business/Self-Employed Division’s approach to addressing nonfilers. The IRS generally sends up to two notices requesting that selected nonfilers file a return. In FY 2018, the IRS developed a Nonfiler Strategy incorporating recommendations from our prior reports and other oversight organizations. From Tax Years (TY) 2015 through 2022, potential nonfilers increased by 5.9 million as the IRS prioritized other inventories. The gross Tax Gap is the estimated difference between the amount of tax owed, and the amount paid voluntarily on time. For TY 2022, the projected gross Tax Gap is $696 billion. Approximately $63 billion (9 percent) is due to nonfilers. What did we find? As of June 30, 2025, more than a year after the IRS began its most recent high-income nonfiler initiative, nearly 33,700 taxpayers remained in first notice status, preventing further collection action. We estimate that continuing the enforcement process on these taxpayers could result in secured returns or tax assessments for 10,482 cases involving 9,119 taxpayers and approximately $321 million in potential additional tax due. After we raised this issue, the IRS moved the cases out of first notice status in March 2026. We also found that nearly 11,000 cases involving 8,853 taxpayers remained unworked in the queue as of June 30, 2025 (the queue is a list of collection inventory awaiting further assignment). Prioritizing these cases could result in secured returned or tax assessments for 2,962 cases involving 2,399 taxpayers and approximately $91 million in potential additional tax due.

Two new reports: Addressing nonfilers and complying with direct contact rules Inbox Treasury Inspector General for Tax Administration Unsubscribe Thu, Sep 3, 6:39 AM (1 day ago) to me TIGTA Agencywide Coordination Could Enhance the IRS’s Approach to Nonfilers Why did we do this audit? Nonfilers are taxpayers who do not timely file a required tax return. We accessed the Small Business/Self-Employed Division’s approach to addressing nonfilers. The IRS generally sends up to two notices requesting that selected nonfilers file a return. In FY 2018, the IRS developed a Nonfiler Strategy incorporating recommendations from our prior reports and other oversight organizations. From Tax Years (TY) 2015 through 2022, potential nonfilers increased by 5.9 million as the IRS prioritized other inventories. The gross Tax Gap is the estimated difference between the amount of tax owed, and the amount paid voluntarily on time. For TY 2022, the projected gross Tax Gap is $696 billion. Approximately $63 billion (9 percent) is due to nonfilers. What did we find? As of June 30, 2025, more than a year after the IRS began its most recent high-income nonfiler initiative, nearly 33,700 taxpayers remained in first notice status, preventing further collection action. We estimate that continuing the enforcement process on these taxpayers could result in secured returns or tax assessments for 10,482 cases involving 9,119 taxpayers and approximately $321 million in potential additional tax due. After we raised this issue, the IRS moved the cases out of first notice status in March 2026. We also found that nearly 11,000 cases involving 8,853 taxpayers remained unworked in the queue as of June 30, 2025 (the queue is a list of collection inventory awaiting further assignment). Prioritizing these cases could result in secured returned or tax assessments for 2,962 cases involving 2,399 taxpayers and approximately $91 million in potential additional tax due.